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Hospitals to recoup franchise payments

It’s unknown if institutions will recover 100 percent of the fees.

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By Ben Sutherly, Staff Writer 11:19 PM Thursday, September 2, 2010

Gov. Ted Strickland told hospitals Thursday, Sept. 2, they’ll recoup franchise fees that enabled the state to secure $1.7 billion in federal funds for the current state budget.

Local hospitals in August 2009 feared they would sustain a net loss of at least  $33.5 million to franchise fees during the two-year budget cycle. It wasn’t immediately clear if each local hospital will be fully reimbursed.

Hospitals statewide faced a net shortage of about  $150 million, said Ohio Hospital Association spokeswoman Tiffany Himmelreich.

Hospital executives said they were taken aback last year by potential franchise fee losses, thinking until late in the budget process that they would be fully reimbursed.

Hospitals agreed not to lobby against the budget bill based on an understanding that they’d recoup all of the franchise fees.

Strickland’s administrative action was made possible by a recent six-month extension of the enhanced federal matching rate for Medicaid, according to the association. That extension, coupled with an overall 38 percent reduction in franchise fees, should help hospitals retain health care jobs and maintain services, the group said.

Contact this reporter

at (937) 225-7457

or bsutherly@DaytonDailyNews.com.

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